Parsley Energy CEO calls out industry for shale gas flaring

(Reuters) – The chief executive of shale producer Parsley Energy (N:) on Wednesday became the latest executive to call out the industry on its high rate of flaring in the top U.S. oil field.

Matt Gallagher, chief executive of Permian Basin shale producer Parsley, called natural gas flaring a “black eye” and urged the industry to reduce emissions, during a speech at the NAPE Summit in Houston.

Flaring, or deliberately burning natural gas produced as a byproduct to oil, can worsen climate change by releasing carbon dioxide.

Larger oil and gas companies are increasingly calling out their peers for flaring, which is rising in the Permian Basin. Oil drillers tend to flare or vent gas when they lack pipelines to move it to market, or when prices are too low to make transporting it worthwhile.

Scott Sheffield, CEO of Pioneer Natural Resources (NYSE:), in November said producers should get flaring and venting rates to 2% or less and not drill wells before pipelines are complete.

On Wednesday at a separate oil and gas conference in Houston, the head of Royal Dutch Shell’s Permian Basin operations, Amir Gerges, said the region had become “famous” for flaring and needs “robust, fit-for-purpose policies and regulatory requirements that incentivize reduction in flaring.”

Permian Basin flaring and venting totaled about 293.2 billion cubic feet last year, according to state regulatory data compiled by independent energy researcher Rystad – up about 7% from 2018.

Permian producers need to lower gas flaring rates below 5%, Gallagher said. He pointed to his company’s recent acquisition of Jagged Peak Energy and neighboring properties where Parsley was not flaring natural gas, but Jagged Peak had a 25% flaring rate. “It literally is right next to us,” Gallagher said. “It was a choice.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.